Although the days of doing business “with a handshake” may be long gone, some people still make verbal agreements. Whether you’re a business owner, a landlord, or an individual agreeing to lend a friend or relative some money, you might be tempted to simply “shake on it” and hope everything is okay. You may even worry you will offend the other person by insisting on a written agreement. This can be a costly and time-consuming mistake.
The problem with oral contracts is it’s often very difficult to prove exactly what each side agreed to. Many people have been surprised to discover their contract doesn’t hold up in court. No matter how much you trust someone, it is best to reduce your agreement to writing. Spending a reasonable amount of money on an attorney now is far better than wasting time and a more substantial amount of money down the road because you didn’t put your agreement in writing.
When Oral Contracts Are Enforceable
In some cases, a verbal agreement is still legally enforceable. Generally speaking, the following types of contracts must be in writing to be valid:
- Contracts for the sale or purchase of goods over $500
- Contracts where performance will take more than one year to complete
- Contracts for the sale or purchase of real property
- Contracts guaranteeing payment of a debt
In many cases, however, case law has carved out exceptions to these general rules. Furthermore, the courts tend to regard written agreements more favorably compared to verbal agreements. When the terms of your agreement are in writing, you have a far greater chance of obtaining a satisfactory result in your case. In situations where there is ambiguity surrounding performance under a contract, it can be very difficult to prove your position when you didn’t get your agreement in writing.
Just because your agreement falls under one of the types of contracts that aren’t required by law to be written down, it’s still a wise decision to have an experienced lawyer draft your agreement. Your lawyer can use terms designed to protect you and your assets. Your lawyer also knows how to spot potential problem areas and sources of future conflict.
Rushing & Guice, P.L.L.C.: Mississippi Business Law Attorneys
Do you need help with drafting a contract? Don’t put your interests at risk by making a verbal agreement or attempting to handle your contract on your own. We are here to help. Call us today at (228) 374-2313 to discuss your case.
